Many videos mention the importance of bankroll management, but I want to put the spotlight on the real cost of commissions. According to my plan, Betfair charges me a 2% commission on net profit per market, which seems low. In reality, as I'm building strategies for scale, I saw that while my strategy could be profitable, the net profit could be negative. I'll explain:
A strategy could have accumulated profit over time, meaning that the ratio between winning or losing is in favor of winning. It doesn't mean I actually generated net profit.
Take a look at this view of a Greyhound Racing pregame strategy I ran for 8 days, with 1,842 bets matched:
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- You can see I won £87.17 Gross - it means that summing all my bet's profits and losses yielded a positive profit.
- You can see I lost £0.29 Net - it means that summing all my bet's profits and losses, minus the commissions I paid to Betfair, yielded a negative profit.
It happens in strategies that have a lot of winning and a lot of losses, as Betfair deducts from each bet's profit and not from the profit of the overall strategy. If you don't track your numbers very closely, you could easily think that your profit is positive, but you are actually losing money.
In good strategies I run, I have an Avg. Gross Profit of >3% and an Avg. Net Profit of around 3%.
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